Dutch consumer electronics giant Philips has entered into a five-year brand licensing agreement with Videocon Industries to outsource its entire TV business, including manufacturing, distribution and selling.
Under the brand-licensing agreement, Videocon will source, market and provide after-sales service in India for Philips TV sets. Videocon will also manufacture Philips colour TV sets as per specifications.
"The brand licensing agreement, under which Videocon assumes responsibility for the sourcing, distribution, marketing and sales of all Philips' consumer television activities in India, is aimed at bringing the TV business back into profitability from 2010 onwards," Philips Electronics India managing director and CEO Murali Sivaraman said.
The agreement, however, is limited to the TV segment and is only for five years, he added.
Philips hopes the new marketing strategy to help push its TV sales and increase its market presence in India.
Philips had a similar arrangement with Japanese firm Funai for its TV business in the US, which proved to be very successful and, Sivaraman said, the company has decided to replicate the idea in India.